This is my first new topic post on VP.
SRG Housing finance is a Udaipur based Housing Finance Company. It mainly provides 3 types of loans:
- Loan Against Property
- Individual housing purchase/renovation loans
- Loans to builders for purchasing land, construction
Company’s outstanding loan portfolio has grown at a CAGR of 66.70 % over a five year period from Rs.5 crores as of March 31, 2011 to Rs. 38.67 crores as of March 31, 2015. Similarly, profit after tax has grown at a CAGR 70.60 % of over a five year period from Rs. 0.18 crores for Fiscal 2011 to Rs. 1.53 crores for Fiscal 2015.
FY 2014-15 AR has been released and is available [here] (http://www.srghousing.com/AnnualReport.aspx)
##FY 15 Highlights:
- 46.5% growth in the loan book, 34.19% increase in the operating profit and 28.6% increase in PAT
- Got sanctioned a term loan of 30 Cr from SBI
- Migrated from the BSE SME platform to the BSE main board
- Issued its first dividend of Rs 0.25 per share and bonus in the ratio of 2:5
- Promoter shareholding increased from 45.4% to 49.6%
- Company looking to expand its offices in tier 2/3 cities in Rajasthan.
- FY 15 gross NPAs of 1.04% (net 0.76%)
- Capital adequacy ratio of 50%
- Limited geographical scale of operations. Currently headquartered in Udaipur with 9 satellite offices around it.
- Promoters have floated other companies, a dilution in focus could be detrimental to the future prospects of this business.
- Satkar Finance Private Limited - NBFC
- SRG Global Builders Private Limited - Builders and Developers
- Hriday Insurance Consultant Private Limited - Risk Management Consultants
- Shri Nakoda Infotech Private Limited - Information Technology
- SRG Insurance Brokers Private Limited - Insurance Broking
- SRG Global Solutions Private Limited - Software, BPO, Information Technology
- S R G Securities Finance Limited - NBFC
- MD’s salary is 22.86% (Rs 35 lakhs) of the FY 15 net profit. IMO this is quite high for such a small company.
- Stock price has taken a beating, from a high of Rs 115 it is now down to Rs 47. Two bulk deals have happened in the past week at a price of around Rs 48.
Its current market cap is 53.7 Cr and it has a loan book of 38.7 Cr. At 1.4x the loan book I feel the company is fairly valued but a proven track record in growth and a small base leaves a lot of scope for further growth.
Disclosure: Not invested. Evaluating.